South Florida Bloggerage

39 responses so far ↓

• 1 Terry /Jan 31, 2008 at 9:11 am  Vote:    

  Come on, let’s get back to business:
  What is going on with the real estate market in Miami ? Which condo buildings are going to close next ? Which ones will be successfull ? What is your advice regarding the new Florida bill on property taxes ? Should we, potential condo buyers, wait more ? Until when ?

  Your blog is a great source of information ! Keep it that way ! Let’s not transform it into a forum to discuss semantics and philosophy…

• 2 cyrus /Jan 31, 2008 at 10:20 am  Vote:    

  bloggerage/brokerage…doesn’t really matter. i think the consumer/prospect is looking for a guy who will totally transparent and honest with them, will work hard to get the best deal whilst keeping transactions as smoothly as possible – acting as a buffer zone between the seller and buyer and juggling the headaches to make sure both sides are well taken care of. this is difficult sometimes as egos get hurt. especially in tougher mkts as these. best of luck Lucas.

• 3 Ignacio /Jan 31, 2008 at 10:23 am  Vote:    

  Hey,

  Give the man a break, I bet that getting fired and get a lawsuit the same day is not easy to swallow.

  Let him rant and blow some steam

• 4 GG /Jan 31, 2008 at 10:42 am  Vote:    

  let’s go back to business,

  now that many blgs have opened, interest rates are getting lower, $25k additional tax break…So, Lucas which has are(s) has a brighter “close” future
  1. ParkWest
  2. Brickell/Miami River
  3. Downtown
  4. Brickell….

  and which blgs do you think are the best for first home and for investment.

  and don’t worry about the suit…you are fine.

  thanks,

  gg

• 5 RMP /Jan 31, 2008 at 10:52 am  Vote:    

  I am deeply offended about the word ‘bloggerage’.

  Later today I will discuss with my attorney whether or not to sue you for offending me on the internet where I voluntarily came to read your entry.

• 6 Un-Related /Jan 31, 2008 at 11:01 am  Vote:    

  Today’s Miami Herald article could be viewed as a pre-cursor to the “mad developer” syndrome. I will refrain from stating my opinion. However I do wonder when and if “Gourge” is going to be suing the RCRS agents?? That should be couched nicely enough to keep Greenburg Traurig off of my doorstep….

  GOOD READING: http://www.miamiherald.com/business/story/400454.html

• 7 Dave /Jan 31, 2008 at 1:05 pm  Vote:    

  Could a thread be started on the condo developments in Sunny Isles Beach? There is so much construction that I think only the uninformed foreigners with money are buying in this market. I would buy one but the supply is so large right now. Any thoughts on this?

• 8 censoring? /Jan 31, 2008 at 1:07 pm  Vote:    

  Lucas,
  I saw an earlier post by someone who criticized your arguments. Although I thought his criticism was not well articulated, I certainly thought it would not have been removed by you. I am disappointed — this is the first time I’ve ever noticed you self-editing posts. Please re-post his comment and allow your advocates to dispute the poster’s arguments (as I’m sure they will). Thanks.

• 9 Please retract my latest /Jan 31, 2008 at 1:09 pm  Vote:    

  I apologize,
  I just noticed his post elsewhere. I stand corrected and feel like a fool for impeaching you in front of all…

• 10 Joker Joe /Jan 31, 2008 at 1:26 pm  Vote:    

  Bloggerage – that’s a joke, isn’t it?

• 11 Samir Patel /Jan 31, 2008 at 1:46 pm  Vote:    

  I had an interesting email back and forth with a potential client a few days ago and in this communication time and again the buyer had a very strong opinion on where he believed prices would go. I urge everyone to begin thinking of the actual desirable units available for sale in all these areas we speak of. In my opinion a desirable unit (in terms of resale) would be something with a direct bay view. Lucas, it would be greatly appreciated if you can show everyone here which units in each building are actually on the waterside of the property so we can all realize that all this increased inventory is not all the same. In my opinion (yes this is an opinion and you are free to disagree) those waiting out the market will realize that people all buy for different reasons and if I were buying a primary residence I would want the best views for the money on the highest floor of a solid development. If many think like me, I would expect inventory will become very tight over the next 6 months. Some buildings will stand no chance, while others will prevail. It is the same matter as you are seeing some developers cancel preconstruction projects. They were approved but will never be built. This only can help anyone who bought in a building who is worried. Your competition is atleast stabalizing. Lets see a breakdown of the numbers. Also keep in mind that many of these buildings do not even have 1 bedrooms facing the water. This puts the building next door in a better possition for reselling.

• 12 Samir Patel /Jan 31, 2008 at 1:48 pm  Vote:    

  Sorry for all the misspellings. I wish wordpress had a built-in spellcheck.

• 13 Trader Joe /Jan 31, 2008 at 1:55 pm  Vote:    

  Samir – I disagree somewhat. Yes, some units are much better than others, but hasn’t that already been reflected in the current prices? That is, the direct water views are much higher than those without. A rising tide rises all boats – or condo units as the case may be – and the opposite is also true. There is no downside in waiting if you are set on a particular unit. The downward slide will continue for some time now, possibly into 2010! Once at the bottom, the rise out will be slow so if you miss the bottom by a few months, the harm is you’re gonna pay 1-2% more. A lot better than see the price drop 20% and take 5+ years to recover. The bottom line is the views are already priced into the market.

• 14 Trader Joe /Jan 31, 2008 at 2:14 pm  Vote:    

  Meant NOT set on a particular unit.

• 15 Adrian Salgado /Jan 31, 2008 at 2:24 pm  Vote:    

  Lucas,

  Where do I sign up?

• 16 Matt Arledge /Jan 31, 2008 at 4:10 pm  Vote:    

  Dave – i recently bought a condo in sunny isles and am happy to discuss it.

  Lucas – please let us know how we can be of support

• 17 Peter Santiago /Jan 31, 2008 at 4:28 pm  Vote:    

  Good to see that all is resuming normalcy again…

  This blog rocks.

  Peter.

• 18 lara /Jan 31, 2008 at 5:28 pm  Vote:    

  Agree with Samir that waterfront condos will hold prices since those are the most valuable. I think that if you see the deal and want to live in the area buy it.

  Sunny Isles. Yes, there is very much overbuilding. But ocean front condos were always bought by people with money. There are a lot of deals now where prices dropped more than $200,000 for condos that were priced at $700,000 and more in 2005. My opinion is that you can find very good deals now.

• 19 Trader Joe /Jan 31, 2008 at 5:41 pm  Vote:    

  But the price differential was already priced into the beachfront versus inland homes already. In fact, the hype in pricing probably caused beachfront to jump by a larger percentage than inland. So, beachfront may have more to lose in this market. Remember, this is a historic over supply in beachfront condos, in the past beachfront held value because it was scarce compared to inland. That ain’t the case no more. This is an uncharted beachfront condo market and the best case is slight falling prices through 2009….the worst is beachfront will mirror the percentage decline.

• 20 lara /Jan 31, 2008 at 8:34 pm  Vote:    

  I agree with you that beachfrond condo
  prices jumped by a larger percentage. There is an oversupply of them. In re to Sunny Isles for example there is no more place to build on the ocean front. So once this is absorbed that is it. Also usually ocean front condos are not bought by locals. They do not care being on the ocean
  front.
  In Downtown area the situation is more complicated. It is not an established one and I think that it is more overbuilding with the prices almost comparable to the ones in Sunny Isles but it has its appeal for younger dynamic crowd. Also the fact that it is Bay front and close to The Performing Arts Center. For people who care about these issues it is extremely important. Lincoln Center in NY changed the wholy dynamics of UWS . Miami is not NY but the prices are also very much below NY prices.

• 21 Trader Joe /Jan 31, 2008 at 8:43 pm  Vote:    

  lara – there are still several motels in Sunny Isles that can be knocked down so the land is available. The issue is the condo glut for beachfront is rare and a price premium was already assigned to it. They may not make more beachfront, but again the price has been factored into it already, and they can always build up which effectively creates more beachfront. It looks like 75% are still motels in Sunny Isles? The beachfront will fall with all the others and possibly by more dollars because they have run up in price by so much.

• 22 lara /Jan 31, 2008 at 9:22 pm  Vote:    

  I saw some prices in Sunny Isles that go down to 2003. These are not everywhere. But you can find them. 75% are motels? I think that it is an overstatement. Not that many of them. The fact that they still exist is because owners of the land want so much for it that developers considering the price for construction will have sell their condos for $1,000/sq,ft for the end buyer. Now it does not make sense, In several years though I think that it very well might happen.

  In Downtown and close areas it is more complicated but some of the deals that you can find now and would like to live there make sense.
  Again it is just my opinion. I am not a realtor just an out of town investor who spent some time in Miami, bought and sold several properties, have some rental properties, some land.

• 23 Trader Joe /Jan 31, 2008 at 11:28 pm  Vote:    

  Meant 75% were motels and 25% still are….. opps.

  Any more info about Sunny Isles is helpful…..please post more!

• 24 Matt Arledge /Jan 31, 2008 at 11:44 pm  Vote:    

  I have a condo in sunny isles – there are only a few motels/time share properties up here now. Most of the beach is new construction or will be within the next year or so.

  From everything I have learned, there will be downward pressure on prices due primarily to the Trump Towers project in the south – i have received a number of desperation calls from them. It is just too much at one time to be absorbed.

  One Bal Harbour shows that even if you have a great project in an A1 location, it will still take a considerable amount of time to find all of the end users. Hence, WCI has needed extensions on their loans.

  Due to everything being so new in Sunny Isles, this same pattern should repeat but on a bigger scale. I put a 5-7 year time horizon on my purchase – basically because of all of the new beach construction ongoing from 22nd all the way through sunny isles (Mei, Mosaic, Caribbean, Canyon Ranch, Cipriani, Fountainbleu, Paradiso, St. Regis, One Bal Harbour plus buildings recently finished and all of the Sunny Isles inventory). Of course, there will be some rentals out of this plus some will actually be bought as 2nd vacation homes (imagine that) – but still the inventory will knock supply and demand out of whack for a while.

• 25 Dan /Feb 1, 2008 at 12:44 am  Vote:    

  Matt Arledge – I think your post pretty much states the reality of the condo market in Sunny Isles. There is simply too much supply in Sunny Isles (er, Shady Isles on the beach after 2 p.m.) to be absorbed and the past prices increases can not be supported. Hence, prices need to come back down to pre-construction pricing because it is a strong buyers market now. The La Perla has a some decent prices, but those will come down. The Turnberry has a number of expensive units to sell. Are you a realtor? Good post.

• 26 Samir Patel /Feb 1, 2008 at 1:27 am  Vote:    

  I thought recently One Bal Harbour had a resurgence in closings. The important thing is that the closings are happening.

  Dan, I agree – we should come back to pre-construction pricing. This would fill all of these buildings up with end-users which would be best for South Florida.

• 27 Julian /Feb 1, 2008 at 2:17 am  Vote:    

  We had a good laugh over Christmas driving on the A1A from 22nd and heading North. Never mind the older buildings but the number of huge oceanfront developments being built/nearly finished all the way Sunny Isles is unbelievable. Matt Arledge is correct.

  You have to be kidding yourself if you think (1) most are pre-sold – I know one around south to mid Beach which only did 50% before the ‘crash’, and many to companies like “Investment Realty LLC” – i.e flippers (2) that inventory will be absorbed in anything less than 3-5 years

  The good thing is there will be bargains in beachfront to come, a wholly discretionary purchase in a recession always sells at good prices, and – finally – people are beginning to factor in taxes in quantum/per sq ft pricing.

  You got to pay 2-2.5% per year in taxes? (becuase you’re assuming oceanfront goes to out-of-state or foreigners). $20-$40k a year in taxes? That’s gonna knock a chunk off prices, no getting around it.

  (and that’s a whole other debate as to why non-residents have to pay a disproportionate amount to school LOCAL children etc – we’ve also figured out that. So the out-of-towners have even more desire to force prices down to compensate for the inequity).

  We Europeans like the sunshine but we aren’t that stupid

• 28 Terry /Feb 1, 2008 at 3:31 am  Vote:    

  Attn Julian,
  I fully agree with you, especially the last paragraph about non-residents having to pay a disproportionate amount of taxes, not having homestead exemption or other advantages.
  May be it would be good to start a thread on that too, as I am sure we are not the only foreigners who wish to invest wisely in the Miami real estate…

• 29 lara /Feb 1, 2008 at 12:41 pm  Vote:    

  I agree with all of you. I still insist that there are deals to be found now in Sunny Isles in ocean front buildings. Someone mentioned decent prices in La Perla. Yes they are incredible deals now in La Perla at least a couple of months ago. Why? IT was one of the first pre construction deals in Miami at the end of 2001. At that time price/sq.ft was around $180-$200. When I first learned about this building I immediately realized what it can bring not fully though. Original preconstruction prices in La Perla were around $220/sq.ft. All my friends screamed that I was crazy buying for that price. Construction of the building was delayed. So it was completed in 2006. We thought that the building will be bankrupt. The reason it did not go that way because developer had deep pockets and he bought land very cheap before this whole boom.

  Why am I telling you this story? The prices in La Perla are lower because it started earlier, much earlier than other buildings. Prices grew to $700/sq.ft in Trump buildings and may be even more. Today you can find apartments in Sunny Isles in the area of $400/sq ft. in the new buildings. These are deals!

  If you want new buildings the prices are not going much below because of the construction cost. Unless it is going to be a full crush of the whole system. Can it happen. Yes, it can like evrything else under the moon.

  I also invest in other areas of the country like Orange Beach, Alabama and Biloxi, MS. You cannot find anything below $400/sq.ft in brand new buildings even there because of the costs. These places cannot even be compared to Miami.

• 30 Julian /Feb 1, 2008 at 6:40 pm  Vote:    

  Lara – bring me a 1200 sq ft ocean front (pref) SE view in a new, quality building that has relatively few problems for $400-$500 per sq ft in Miami Beach and I’ll close tomorrow, cash.

  But really, I will not pay $25k in taxes a year for a $1m apartment at $700-$1000 a sq ft on the beach when I can stay at the Delano, Ritz Carlton, you name it, for A MONTH A YEAR just for the taxes, never mind the HOA. One place I looked at, linked to a hotel, $25k a year in tax, nearly $10k a year in HOA and other fees. Puhleeze.

  And I am not alone – Real Estate is about costs as well as “prices per sq ft”. We might be well off and ready to buy interesting investments and interesting places to live but we’re not stupid!

• 31 lara /Feb 1, 2008 at 8:40 pm  Vote:    

  Hi Julian, I cannot bring anything to you because I am not in Miami and I am not a realtor. In Sunny Isles look at La Perla listings. I looked at them today after I wrote my comments and I saw at least a couple of great deals there. One that I remember is unit 1607. I like this building very much, I think that it has a great style but it is a matter of an individual taste. I have a unit there but it is on a different floor. It has east, north and west views due to a huge wraparound terrace. May be you can find units there with south east views. You can find prices there even below $400/sq.ft. Maitenance and taxes /year are around $12,000- $15,000 for the units around 1,400 sq.ft. I am planning to keep my unit there until the situation changes for the better. It has been rented. Some people do not want to wait and ready to sell for much lower prices

• 32 Buyer Tom /Feb 1, 2008 at 8:56 pm  Vote:    

  See this article. I happen to agree, the meltdown is just starting. The capitulation to drop prices will happen before the end of the summer. Hurricane season is when the Florida real estate will get hammered. I am now a complete bear and do not see ocean front faring well either…. There will be at least a 30% drop from the high’s with an effective 45% decline reached in 2012 for inflation adjusted dollars. That is, the inflation adjusted price in 2012 will be 45% below the high price in south Florida. Only then will home prices ever start a reason appreciation. Lenders will NEVER EVER lend money like that again for residential real estate, the party is over and will NEVER be repeated. If I owned something that I wanted to sell in the next 4 years, I’d mark my price 15% below comp’s and get it over with now…… This is going to get very very ugly.

  http://southflorida.bizjournals.com/southflorida/stories/2008/02/04/story1.html?b=1202101200^1584230

• 33 Buyer Tom /Feb 1, 2008 at 9:01 pm  Vote:    

  I personally think inflation adjusted prices in 2012 will be 45% of the high prices in Souther Florida. It really will be that bad….

• 34 Terry /Feb 2, 2008 at 3:54 am  Vote:    

  @Julian,

  Once again I agree fully with you. The math about renting vs buying is just ridiculous in Miami, so unless you get a real good pricing (and wait till the real estate rocks bottom) it is just not worth it for foreigners who want to enjoy Miami a few weeks per year and may be retire one day to a sunny place somewhere on earth.

• 35 Samir Patel /Feb 2, 2008 at 9:29 pm  Vote:    

  If you want to just use a property a few weeks a year then just book a hotel room. Or buy condo/hotel. Although I don’t think you make rarely any income on condo/hotel it is usually very one sided with the management.

• 36 Larry Lang /Feb 3, 2008 at 12:23 am  Vote:    

  I think that with the current conditions it is a perfect time for consumers to start buying. With the voters approving the new tax relief amendment, there will be an increase in the home sales market and a rise in prices. The increase in the homestead exemption and homeowners being able to take their tax base with them will spur the resale market. This will save them hundreds of dollars monthly. With low interest rates, lower property taxes, the tax portability afforded by the new law and lower prices, there has never been a better time to buy.
  Larry Lang

• 37 Dan /Feb 3, 2008 at 12:51 am  Vote:    

  Ummmm, unless aren’t drugs illegal Larry. Those factors will only soften the very hard landing in real estate, they won’t prevent the continued downward slide. The basic economic fundamentals clearly show home prices will continue to decline unless of course the banks decide to give out loans that people can’t pay and lose another $100 billion or so. Odds of the happening a zero.

  With regard to the property tax situation, anything that continues or recreates the distortion in the market is bad…….locking people in to low taxes while other foot the bigger bills was bad economics. They should have allowed that to slowly bleed out of the system over time instead of recreating the mess that will only hurt people in the long run. Bad tax policy.

• 38 Julian /Feb 3, 2008 at 6:16 pm  Vote:    

  Samir

  So much of Miami Beach is “a few weeks a year” use. Are you suggesting that they should all sell up and use hotels? So maybe we could get 12 years inventory on Miami Beach? I guess it’s possible, if it makes more sense just to get a hotel room, as you say…

  Truth is, cost of ownership, even for the well-off is too high and a number of failed beachfront developments need to be turned into hotels. When that process has started (like the downtown condos being converted into rental buildings), I’ll be a buyer.

• 39 Bill P /Feb 3, 2008 at 10:16 pm  Vote:    

  Is Opera Tower going rental?

Leave a Comment